The FCC adopted the rules in February (with chairman
Michael Powell dissenting) but did not release them until Aug. 21.

The Bells claim that the new regulations defy previous court rulings that
criticized the FCC for failing to adopt more narrow network leasing rules.

The suit was filed in the U.S.
Court of Appeals for the D.C. Circuit by SBC Communications Inc., BellSouth Corp, Qwest Communications International Inc.,
and the trade organization United States Telecom Association.

Verizon Communications is expected to file a separate suit.

The Bells said the FCC rules perpetuate a wholesale leasing system that
requires them to provide network access at below-cost rate.

The suit said the rules have cost the Bells $2.6 billion in losses.

The Competitive Telecommunications Association, which
represents carriers that lease facilities from the Bells, denounced the court action.

'The USTA petition ignores both the facts and the law.
USTA is simply engaged in a blatant attempt at forum shopping. The petition
should be summarily rejected,' CompTel President H.Russell Frisby, Jr. said in a
statement.